Iran’s President Hassan Rouhani has arrived in Baghdad on his first official visit to the nation that Tehran once fought a bloody war against and later backed in the battle with the Islamic State of Iraq and the Levant (ISIL or ISIS) group.

He will visit a Shia shrine in the Iraqi capital and then meet President Barham Salih and Prime Minister Abdel Abdul Mehdi, as well as visit other politicians and Shia leaders.

Since Rouhani’s election in 2013, Iraq has relied on Iranian paramilitary support to fight ISIL following the group’s capture of the Iraqi city of Mosul and other territories in both Iraq and Syria.

Now, with the armed fighters facing a final territorial defeat in the Syrian village of Baghouz, Iran is looking for Iraq’s continued support as it faces a maximalist pressure campaign by President Donald Trump after his decision to withdraw the United States from Tehran’s nuclear deal with world powers.

Rouhani’s visit is a strong message to the US and its regional allies that Iran still dominates Baghdad, a key arena for rising tension between Washington and Tehran.

“We are very much interested to expand our ties with Iraq, particularly our transport cooperation,” Rouhani said at Tehran’s Mehrabad airport before departing for Iraq.

“We have important projects that will be discussed during this visit.”

Speaking from the Iraqi capital Baghdad, Al Jazeera’s Natasha Ghoneim said Rouhani’s visit is a two-pronged message to both the US and inner Iranian dissent.

“Since the US reimposed sanctions last year the economy has continued to deteriorate, and [Rouhani] is facing pressure from within,” she said.

“There have even been calls for his ouster. So he comes to Iraq with the hope of bolstering economic ties in Iraq and Iran and with the hope of sending a clear message to the US that this relationship between the two countries is unshakeable.”

During the three-day visit, a series of agreements will be signed in fields such as energy, transport, agriculture, industry and health, Iran’s state news agency IRNA reported.

“Iraq is another channel for Iran to bypass America’s unjust sanctions imposed on Iran. This trip will provide opportunities for Iran’s economy,” a senior Iranian official, who is accompanying Rouhani, told Reuters news agency.

Increasing trade ties

The parlous state of Iran’s economy since Trump’s decision last May to pull out of the 2015 nuclear deal between Iran and six major powers has pushed the country’s leaders to try to expand trade ties with its neighbours.

The agreement lifted sanctions that had been imposed by the US, European Union and the United Nations in return for Iran’s curbs on its sensitive nuclear programme.

The Trump administration, which said the accord was too generous and failed to rein in Iran’s ballistic missile programme and its involvement in regional conflicts such as in Syria and Yemen, reimposed sanctions on Tehran.

Other signatories to the deal have been trying to salvage the pact after the US exit, but the American sanctions have largely scared off European companies from doing business with Iran.

The Europeans have promised to help firms do business with Iran as long as it abides by the deal. Iran has itself threatened to pull out of the 2015 deal unless the European powers demonstrably protect its economic benefits.

Addressing a joint press conference with Iraq’s top diplomat Mohammed Ali al-Hakim on Sunday, Iran’s Foreign Minister Mohammad Javad Zarif said they had held “very good discussions”.

The Iranian foreign minister thanked Iraq for having “refused the unjust and illegal sanctions imposed on the Iranian people” in reference to the US measures.

After Turkey, Iran is the top supplier of imported goods to Iraq, and Rouhani said his discussions with Hakim covered sectors including trade and health.

Iran and Iraq plan to raise their annual bilateral trade to $20bn from the current level of $12bn, according to Rouhani. The bulk of the trade balance is tilted towards Iran with gas and energy exports.

“Rouhani is coming to discuss … trade between the countries [and] the issue of easing trade exchanges in Iraqi local currency and finding other ways, like Germany and Britain, to adopt an alternative European currency to circumvent US sanctions,” Iraqi political analyst Hisham al-Hashemi told the AFP news agency.